IPO Patterns in Euronext After the Global Financial Crisis of 2007‑ 2008
Autor(a) principal: | |
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Data de Publicação: | 2021 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10316/100124 https://doi.org/10.14195/2183-203X_52_6 |
Resumo: | This paper looks into the pricing patterns of 161 IPOs that occurred in 2009‑ 2017 in the Euronext markets of Amsterdam, Brussels, Lisbon and Paris. Across all the IPOs, we find a first‑ day raw return of 1.4% and an industry adjusted return of 1.2%. After one year, the average raw returns are slightly higher (around 4.5%) and the average adjusted returns are negative (around ‑ 2.7%). These first day returns are lower whilst the long run returns are higher than those reported in other studies, most notably in those that use periods that overlap our sample. Healthcare is the industry that presents higher initial underpricing (2.3% industry‑ adjusted return), whilst the Technology industry presents the highest one year underperformance (‑ 29.5% industry adjusted return). Our findings are in line with the market conditions and investor sentiment hypotheses according to which, when market conditions are poor (crises), uninformed investors are not so active and optimistic in the IPO market, hence underpricing and subsequent underperformance tend to be lower. A possible explanation for the different outcomes is that the global financial crises dampened persistently the activity and optimism of uninformed IPO investors, even when the European stock market and the economy in general were already recovering. |
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IPO Patterns in Euronext After the Global Financial Crisis of 2007‑ 2008Padrões dos IPOs na Euronext Após a Crise Financeira Global de 2007‑ 2008IPOEuronextunderpricingmarket conditionsinvestor sentimentThis paper looks into the pricing patterns of 161 IPOs that occurred in 2009‑ 2017 in the Euronext markets of Amsterdam, Brussels, Lisbon and Paris. Across all the IPOs, we find a first‑ day raw return of 1.4% and an industry adjusted return of 1.2%. After one year, the average raw returns are slightly higher (around 4.5%) and the average adjusted returns are negative (around ‑ 2.7%). These first day returns are lower whilst the long run returns are higher than those reported in other studies, most notably in those that use periods that overlap our sample. Healthcare is the industry that presents higher initial underpricing (2.3% industry‑ adjusted return), whilst the Technology industry presents the highest one year underperformance (‑ 29.5% industry adjusted return). Our findings are in line with the market conditions and investor sentiment hypotheses according to which, when market conditions are poor (crises), uninformed investors are not so active and optimistic in the IPO market, hence underpricing and subsequent underperformance tend to be lower. A possible explanation for the different outcomes is that the global financial crises dampened persistently the activity and optimism of uninformed IPO investors, even when the European stock market and the economy in general were already recovering.2021-07info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articlehttp://hdl.handle.net/10316/100124http://hdl.handle.net/10316/100124https://doi.org/10.14195/2183-203X_52_6eng0872-4733Silva, NunoSebastião, HelderHenriques, Diogoinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2022-05-12T10:00:09Zoai:estudogeral.uc.pt:10316/100124Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T21:17:35.055682Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
IPO Patterns in Euronext After the Global Financial Crisis of 2007‑ 2008 Padrões dos IPOs na Euronext Após a Crise Financeira Global de 2007‑ 2008 |
title |
IPO Patterns in Euronext After the Global Financial Crisis of 2007‑ 2008 |
spellingShingle |
IPO Patterns in Euronext After the Global Financial Crisis of 2007‑ 2008 Silva, Nuno IPO Euronext underpricing market conditions investor sentiment |
title_short |
IPO Patterns in Euronext After the Global Financial Crisis of 2007‑ 2008 |
title_full |
IPO Patterns in Euronext After the Global Financial Crisis of 2007‑ 2008 |
title_fullStr |
IPO Patterns in Euronext After the Global Financial Crisis of 2007‑ 2008 |
title_full_unstemmed |
IPO Patterns in Euronext After the Global Financial Crisis of 2007‑ 2008 |
title_sort |
IPO Patterns in Euronext After the Global Financial Crisis of 2007‑ 2008 |
author |
Silva, Nuno |
author_facet |
Silva, Nuno Sebastião, Helder Henriques, Diogo |
author_role |
author |
author2 |
Sebastião, Helder Henriques, Diogo |
author2_role |
author author |
dc.contributor.author.fl_str_mv |
Silva, Nuno Sebastião, Helder Henriques, Diogo |
dc.subject.por.fl_str_mv |
IPO Euronext underpricing market conditions investor sentiment |
topic |
IPO Euronext underpricing market conditions investor sentiment |
description |
This paper looks into the pricing patterns of 161 IPOs that occurred in 2009‑ 2017 in the Euronext markets of Amsterdam, Brussels, Lisbon and Paris. Across all the IPOs, we find a first‑ day raw return of 1.4% and an industry adjusted return of 1.2%. After one year, the average raw returns are slightly higher (around 4.5%) and the average adjusted returns are negative (around ‑ 2.7%). These first day returns are lower whilst the long run returns are higher than those reported in other studies, most notably in those that use periods that overlap our sample. Healthcare is the industry that presents higher initial underpricing (2.3% industry‑ adjusted return), whilst the Technology industry presents the highest one year underperformance (‑ 29.5% industry adjusted return). Our findings are in line with the market conditions and investor sentiment hypotheses according to which, when market conditions are poor (crises), uninformed investors are not so active and optimistic in the IPO market, hence underpricing and subsequent underperformance tend to be lower. A possible explanation for the different outcomes is that the global financial crises dampened persistently the activity and optimism of uninformed IPO investors, even when the European stock market and the economy in general were already recovering. |
publishDate |
2021 |
dc.date.none.fl_str_mv |
2021-07 |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10316/100124 http://hdl.handle.net/10316/100124 https://doi.org/10.14195/2183-203X_52_6 |
url |
http://hdl.handle.net/10316/100124 https://doi.org/10.14195/2183-203X_52_6 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
0872-4733 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
repository.mail.fl_str_mv |
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1799134071402528768 |